In-Flight Retailer SkyMall Files for Chapter 11 Bankruptcy Protection

(Los Angeles Times/TNS) -

SkyMall, the company that produces in-flight catalogues located on nearly every domestic flight, filed for Chapter 11 bankruptcy protection on Thursday, after struggles to reach passengers who were turning to smartphones and tablets during flights.

SkyMall LLC, in papers filed with the U.S. Bankruptcy Court in Phoenix, stated that it had evaluated the company’s alternatives and determined that the filing was in the best interests of the company and its creditors.

Delta Airlines, American Airlines and U.S. Airways are included in the company’s list of creditors holding the 20 largest unsecured claims.

In the petition, SkyMall estimated its assets range from $1 million to $10 million and that its liabilities range from $10 million to $50 million.

The in-flight catalogue reaches an estimated 650 million travelers each year. In 2013, SkyMall lost $3.2 million from May to September 2013, as reported by its parent company, Xhibit Corp., an Arizona marketing firm.

SkyMall has been struggling to deal with the increased use of mobile digital devices on planes, which provide potential customers with other distractions besides its catalogue. In 2013, the Federal Aviation Administration eased restrictions on the use of portable electronic devices, allowing passengers to keep smartphones and tablets powered up during takeoffs and landings. Plus, most passengers are able to access wireless internet.

SkyMall Chief Executive Kevin Weiss said in April that he was ready to invest more in online sales.

“Like everything else, we have to evolve,” he said.

To increase online sales, the company planned to spend $2.5 million on technology improvements over the next few years, which included an upgraded website as well as an app that would allow readers to point their smartphone camera at an item in the catalogue and buy it with their phone.